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Tesla’s global network has inexplicably crashed, according to Elektrek, which cited users around the world being unable to access their cars via their mobile apps.

Developing…

Two days before Powell unveiled Flexible Average Inflation Targeting (FAIT) as the Fed’s new monetary doctrine on August 27, some analysts were already pricing it in and analyzing how long it would take for the Fed to hit its “target” using conservative assumptions, with BofA concluding that “it would take 42 years to reach the price level target if core PCE remained at 2.1% yoy” but just 2 years if core PCE rocketed to 4.0% (good luck hitting 4% inflation).

And while analysts had no choice but to make sweeping assumptions before AIT was unveiled, they have to do the same now as well after AIT became official, simply because the Fed refused to provide key details about the program it is now operating under, and as Bank of America writes in a post-mortem on FAIT, “The Fed will seek to average 2% inflation over time but specifics around the time frame for averaging and the extent of inflation overshoot were light.“

Still, one can model some scenarios using simple assumptions.

These clearly show just how difficult the Fed’s new inflation objective could be to achieve as the following analysis from BofA’s Claudio Irigoyen shows, using a few scenarios for average 2% headline PCE assuming a non-flexible average inflation target.

To wit: if the Fed began its averaging period at the start of 2017 and monthly headline PCE is equal to 2.1% y/y going forward it would take 11 years to achieve the inflation target. Alternatively, if one uses 2008, or even 2000, as the starting year for the “average period” and the monthly PCE inflation print is 2.1% y/y, then it would take either three generations – 59 years – or two generations of trades, (37 years) to average 2% headline PCE.

Sadly, it’s not starting off well: as the strategist notes, the BofA’s house view is for headline PCE of 1.6% y/y for 2021, “which would mean an even longer time until the target is achieved.”

Of course, the time period would be truncated if the Fed somehow managed to hit monthly headline PCE of 3.0% y/y (or higher): in that case, achieving the target would take about one year. Unfortunately, such inflation – which would only materialize if these was a burst in wages – appears impossible to none other than the Fed: as the FOMC’s latest economic projections show, the max inflation overshoot in the Fed’s 2023 inflation forecasts is 2.1%.

In other words, even the Fed admits that we are looking at decades before the Fed will hike rates, unless of course the Fed is given a greenlight to wire digital money into US households directly… something which the Fed itself admitted is the last-ditch attempt to spark inflation at any cost.

One week ago, New York City Mayor Bill de Blasio announced that he will furlough himself and his City Hall staff for one week as the city weathers a budget (and everything else too) crisis.

“We’ve already had to make some tough cuts,” de Blasio announced last Wednesday.

“We’re doing everything we can to stop those cuts from becoming worse.”

Blasio, his wife first lady Chirlane McCray, and nearly 500 other staff members will take a week of unpaid furlough sometime between October and March 2021. The largely symbolic move is projected to save the city $860,000. And since “symbolic” was the key word here, moments ago the socialist mayor announced that New York City would expand its week long furloughs to another 9,000 employees to save $21 million, they mayor said this morning.

All managerial and non-represented employees must take five furlough days from Oct. 1 through March, the mayor revealed.

Alas, this latest round of furloughs will not be nearly enough as the city faces a $9 billion shortfall in revenue through June 2021. The mayor has warned of as many as 22,000 layoffs in the absence of federal financial aid or approval from the state for long-term borrowing.

“I know this is difficult news for the dedicated public servants of our city,” de Blasio said. “But we are forced to make these difficult decisions as we face a massive budget shortfall with no help in sight.”

The furloughs come as New York State is contemplating following New Jersey in slapping millionaires with higher taxes. A tax hike appears virtually inevitable should Gov Andrew Cuomo’s hope that Congress will appropriate additional aid fails.

 

 

Authored by Paul Joseph Watson via Summit News,

The Eiffel Tower in Paris has been evacuated after a bomb threat from a man shouting “Allahu Akbar”.

A security perimeter was established around the famous landmark after authorities received a bomb threat via an anonymous phone call.

This was followed by reports of a man near the tower threatening to “blow up everything” while shouting “Allahu Akbar,” a common refrain of Islamic terrorists, a police source told Sputnik.

Social media users posted image of armed forces on the scene.

Les vérifications sont en cours. Selon nos informations la @LaTourEiffel est évacuée pic.twitter.com/FiIK8TfxEM

— Barthelemy Bolo (@B2Bolo) September 23, 2020

pic.twitter.com/E5j8UXsvqE

— Amaury Bucco (@AmauryBucco) September 23, 2020

The area around the tower is currently closed to traffic as authorities investigate the incident.

Back in 2017, Paris announced that it would be spending 20 million euros on a protective barrier around the Eiffel Tower to restrict access after a series of attempted terror attacks.

This put an end to the landmark’s spacious surrounding area which had provided a pleasant experience for both tourists and locals for decades.

Then diversity arrived.

*  *  *

In the age of mass Silicon Valley censorship It is crucial that we stay in touch. I need you to sign up for my free newsletter here. Also, I urgently need your financial support here.

Via AlMasdarNews.com,

The U.S. Army has deployed the first batch of its newly established military branch, the “Space Force”, outside the United States, specifically in the Arabian Peninsula.

The Chargé d’Affairs at the United States Embassy in Qatar, Greta C. Holtz, said on her Twitter account on Tuesday, that “Washington has deployed the first group of the space force at Al-Udeid Air Force Base in Qatar.”

She added: “The deployment of the first group of members of the U.S. Space Force to Al-Udeid Air Force Base in Qatar represents the commitment of the United States and Qatar to continue building their strategic partnership in the future and in the space field.”

The Space Force was established by a decision of U.S. President Donald Trump on December 21, 2019, and is the first to be established in the country in more than 70 years, and represents the sixth branch of the U.S. military.

The Associated Press provides the following details:

In a swearing-in ceremony earlier this month at Al-Udeid, 20 Air Force troops, flanked by American flags and massive satellites, entered Space Force. Soon several more will join the unit of “core space operators” who will run satellites, track enemy maneuvers and try to avert conflicts in space.

“The missions are not new and the people are not necessarily new,” Benson said.

That troubles some American lawmakers who view the branch, with its projected force of 16,000 troops and 2021 budget of $15.4 billion, as a vanity project for Trump ahead of the November presidential election.

The deployment of the first members of the U.S. Space Force to Qatar’s #AlUdeid Air Base symbolizes the United States’ and #Qatar’s commitment to further building our strategic partnership into the future – and into space! @SpaceForceDoD https://t.co/smdDw0rqHF

— CdA Ambassador Greta C. Holtz (@USAmbQatar) September 22, 2020

The U.S.-Qatari relations in the military field are deepening, as about 13,000 American soldiers, most of them from the Air Force, are stationed at Al-Udeid base, 30 km southwest of the capital, Doha.

* * * 

Meanwhile…

This is kind of like a coming-of-age ceremony for Space Force. You’re not a full branch of the American military until you’ve deployed to the Middle East on some vaguely-defined and never-ending mission. https://t.co/JGYDBj7JGu

— Gregg Carlstrom (@glcarlstrom) September 21, 2020

Oil prices have chopped around overnight, rallying hard as Europe opened after weakness following last night’s surprise crude build reported by API.

“The API was positive I’d say, with draws in gasoline and distillates” and crude little changed, said Bjarne Schieldrop, chief commodities analyst at SEB AB. “A large drawdown in the fourth quarter or not is the big question.”

Additionally, as Bloomberg reports, in the near term, the demand outlook looks troubled. In Europe, the profit from turning crude into diesel slipped toward $2 a barrel earlier, a record low in data going back to 2011. That curbs demand for crude from refineries. The head of Russia’s Gazprom Neft PJSC said that the recovery in global oil consumption has indeed slowed down.

API

• Crude +691k (-4.0mm exp)

• Cushing +298k

• Gasoline -7.735mm (-1.9mm exp) – biggest draw since Sept 2017

• Distillates -2.104mm (+1.2mm exp)

DOE

• Crude -1.64mm (-4.0mm exp)

• Cushing +4k

• Gasoline -4.03mm (-1.9mm exp)

• Distillates -3.364mm (+1.2mm exp) – biggest draw since March 2020

Dramatic draws in crude, gasoline, and distillates… This is the 7th weekly draw in gasoline in a row and biggest distillates draw since March

Source: Bloomberg

Between Hurricanes and Tropical Depressions, there is still some lingering noise in the production data, which showed a small drop in the last week…

Source: Bloomberg

WTI hovered around $40 ahead of the official inventory data and extended gains on the draws…

Bloomberg Intelligence Senior Energy Analyst Vince Piazza notes that resurgent coronavirus infections in Europe could depress crude demand sooner than we had expected. With the U.S. past peak summer travel season, we’re braced for near-term oversupply. Interestingly, domestic production has reawakened with a WTI rally through $43, pressuring sentiment and balances.

Summary:

• US nears 7 million cases
• Post-LBW spike continues
• Trump moves more money to ‘Operation Warp Speed’
• NYC warns of new hotspots that require “urgent action”
• Mayor de BLasio furloughs 9k workers
• France to announce new COVID restrictions
• Japan on track to approve new COVID drug
• Indonesia reports another daily record
• China, Japan to ease travel restrictions on foreigners

* * *

The number of new COVID-19 cases reported in the US on Tuesday accelerated to 39,345 (compared with +37,417 the prior day), as the post-Labor Day Weekend surge (something that BofA analysts insist is being driven almost entirely by increases in testing) continues. Mirroring the increase in cases, deaths increased by 438, compared with just 270 the day before. California saw cases climb 2,630 yesterday (compared with +3,294 for the prior day), while deaths increased by 53, vs. 31 a day ago.

Meanwhile, the US death toll topped 200,000, a level that was once “unfathomable”, according to the AP.

“It’s completely unfathomable that we reached this point,” said Jennifer Nuzzo, a JHU researcher. The AP also noted that 200,000 deaths from the virus is roughly equivalent to one “9/11” per day for 67 days.

The newswire also noted that the milestone comes “six weeks before an election that is certain to be a referendum in part on President Donald Trump’s handling of the crisis.”

Speaking on CNN, Dr. Fauci said “the idea of 200,000 deaths is really very sobering, in some respects stunning.”  President Trump, meanwhile, said last night that “if we didn’t do it properly and do it right, you’d have 2.5 million deaths”, while Democratic candidate Joe Biden took to twitter to proclaim “it didn’t have to be this bad” (then again, Biden also apparently believes the death toll is 200 million, several orders of magnitude higher than reality). Brazil, which essentially did let its outbreak run wild, is in second place with 137,000 deaths, though some critics believe that number underestimates the true death toll.

Looking ahead, the US is roughly 2 days away from becoming the first country to top 7 million confirmed cases: As of Wednesday morning, the US had 6,897,756 cases, and 200,818 confirmed deaths.

In terms of the big US news on Wednesday, NYC’s health department identified a new cluster of cases yesterday in Brooklyn which it warned could be cause for “significant concern”. the hot spots have been traced to four areas in Queens and Brooklyn.

Speaking Wednesday morning, Mayor de Blasio warned these new ‘hot spots’ require “urgent action” and that NYC will increase enforcement of social distancing rules and also bolster its testing efforts to try and stave off the new outbreak. The mayor also annonced a five-day furlough impacting 9,000 employees – a measure that will reportedly save the city $21 million.

And as we noted earlier, JNJ announced its vaccine candidate would be starting Phase 3 trials, making it the fourth candidate to cross that threshold. Yesterday, UK PM Boris Johnson unveiled new measures to slow a resurgence in the UK’s outbreak. The PM also warned that if the measures aren’t effective, that the UK may return to lockdown, even as a team of BofA analysts warned that tighter COVID restrictions will “scar the UK economy further”.

Wisconsin Gov Tony Evers announced new measures late Tuesday declared a public health emergency and extended an order to wear face masks into November.

Finally, the Trump Administration according to Bloomberg is shifting billions of dollars to ‘Operation Warp Speed’, its vaccine effort which relies on throwing money at vaccine projects, and away from testing and masks. The shift shows the administration’s “increasing focus on a medical solution to ease the pandemic,” Bloomberg said. The new money will swell the program to $18 billion from $10 billion.

“Escalating lockdown measures, fading stimulus measures and Brexit uncertainty will push the economy into contraction over the next two quarters,” said BofA’s Robert Wood, chief UK economist.

Here’s a roundup of other important COVID news from Wednesday:

Global cases have hit 31,615,836, while deaths have reached 971,116 (Source: JHU).

Indonesia sets new daily record: The country reported 4,465 new cases, and another 140 deaths. This is only the fourth time Indonesia has topped 4k daily cases, and each instance has come during the last week (Source: Nikkei).

Tokyo reports 59 cases, marking the lowest daily figure in nearly three months. The number was down from 88 on Tuesday and 98 on Monday, and the lowest since June 30, when 54 cases were reported (Source: Nikkei).

Fujifilm announced that its Avigan drug reduced viral loads and symptoms of COVID-19 patients, clearing the last hurdle to emergency approval in Japan, following months of delays. The Phase 3 clinical study of 156 patients showed that those treated with Avigan improved after 11.9 days, versus 14.7 days for a placebo group (Source: Nikkei).

Japan is finally planning to ease access for foreigners in October, though its restrictions will remain pretty stringent: Only 1,000 visitors will be allowed into Japan per day, and initially only those staying for more than 3 months will be allowed in (and they must quarantine for 2 weeks upon arrival) (Source: Nikkei).

India reported 83,347 cases Wednesday, up from 75,083 on Tuesday, bringing its total to nearly 5.65 million. The death toll has jumped by 1,085 to 90,020. The country’s testing capacity now exceeds 1.2 million per day, by far the highest in the world, and more than 66 million tests have been conducted in total (Source: Nikkei).

China reported 10 cases for Sept. 22, up from just six a day earlier. China is also planning to ease entry rules for foreigners starting Sept. 28 (Source: Nikkei).

Australia sees just 15 new cases in its COVID-19 “hot spot” of Victoria, the country’s second-largest state, and home to its second city, Melbourne. Reporting just 15 cases and five deaths, compared with 28 cases and 3 deaths yesterday (Source: Nikkei).

Goldman Sachs, HSBC and others have paused plans to return workers in London after PM Johnson appealed to Britons to work from home (Source: Bloomberg).

Argentina reported a record 470 COVID-19 daily deaths, pushing its total to 13,952, according to the government’s evening report. It’s the second day in a row Argentina has reported a record rise in fatalities. Officials also confirmed 12,027 new cases, bringing the total to 652,174 (Source: Bloomberg).

Finally, Goldman Sachs analysts have come up with the following chart to measure the level of COVID-19 restrictions in place in the US. Right now, it’s swinging back toward more restrictions as states move to curb an expected “fall surge” as college students return home.

 

Over the past decade, the one common theme despite the political upheaval and growing social and geopolitical instability, was that the market would keep marching higher and the Fed would continue injecting liquidity into the system. The second common theme is that despite sparking unprecedented asset price inflation, price as measured across the broader economy – using the flawed CPI metric and certainly stagnant worker wages – would remain subdued (as a reminder, the Fed is desperate to ignite broad inflation as that is the only way the countless trillions of excess debt can be eliminated and yet it has so far failed to do so).

The Fed’s failure to reach its inflation target – which prompted the US central bank to radically overhaul its monetary dogma last month and unveil Flexible Average Inflation Targeting (or FAIT) whereby the Fed will allow inflation to run hot without hiking rates – has sparked broad criticism from the economic establishment, even though as we showed in June, deflation is now a direct function of the Fed’s unconventional monetary policies as the lower yields slide, the lower the propensity to spend. In other words, the harder the Fed fights to stimulate inflation, the more deflation and more saving it spurs as a result (incidentally this is not the first time this “discovery” was made, in December we wrote “One Bank Makes A Stunning Discovery – The Fed’s Rate Cuts Are Now Deflationary“).

In short, ever since the Fed launched QE and NIRP, it has been making the situation it has been trying to “fix” even worse while blowing the biggest asset price bubble in history.

And having recently accepted that its preferred stimulus pathway has failed to boost the broader economy, the blame has fallen on how monetary policy is intermediated, specifically the way the Fed creates excess reserves which end up at commercial banks instead of “tricking down” all the way to the consumer level.

To be sure, in the aftermath of the covid pandemic shutdowns the Fed has tried to short-circuit this process, and in conjunction with the Treasury it has launched “helicopter money” which has resulted in a direct transfer of funds to US corporations via PPP loans, as well as to end consumers via the emergency $600 weekly unemployment benefits which however are set to expire unless renewed by Congress as explained last week, as Democrats and Republicans feud over which fiscal stimulus will be implemented next.

And yet, the lament is that even as the economy was desperately in need of a massive liquidity tsunami, the funds created by the Fed and Treasury (now that the US operates under a quasi-MMT regime) did not make their way to those who need them the most: end consumers.

Which is why we read with great interest a Bloomberg interview with two former Fed officials: Simon Potter, who led the Federal Reserve Bank of New York’s markets group i.e., he was the head of the Fed’s Plunge Protection Team for years, and Julia Coronado, who spent eight years as an economist for the Fed’s Board of Governors, who are among the innovators brainstorming solutions to what has emerged as the most crucial and difficult problem facing the Fed: get money swiftly to people who need it most in a crisis.

The response was striking: the two propose creating a monetary tool that they call recession insurance bonds, which draw on some of the advances in digital payments, which will be wired instantly to Americans.

As Coronado explained the details, Congress would grant the Federal Reserve an additional tool for providing support—say, a percent of GDP [in a lump sum that would be divided equally and distributed] to households in a recession. Recession insurance bonds would be zero-coupon securities, a contingent asset of households that would basically lie in wait. The trigger could be reaching the zero lower bound on interest rates or, as economist Claudia Sahm has proposed, a 0.5 percentage point increase in the unemployment rate. The Fed would then activate the securities and deposit the funds digitally in households’ apps.

As Potter added, “it took Congress too long to get money to people, and it’s too clunky. We need a separate infrastructure. The Fed could buy the bonds quickly without going to the private market. On March 15 they could have said interest rates are now at zero, we’re activating X amount of the bonds, and we’ll be tracking the unemployment rate—if it increases above this level, we’ll buy more. The bonds will be on the asset side of the Fed’s balance sheet; the digital dollars in people’s accounts will be on the liability side.”

Essentially, the Fed is proposing creating a hybrid digital legal tender unlike reserves which are stuck within the financial system, and which it can deposit directly into US consumer accounts. In short, as we summarized “The Fed Is Planning To Send Money Directly To Americans In The Next Crisis“, something we reminded readers of on Monday:

There still appears to be some confusion about the endgame. The Fed itself spelled it out.

The Fed Is Planning To Send Money Directly To Americans In The Next Crisis: “by getting money to consumers you can limit the depth and duration of a recession”https://t.co/bG03TxiviT

— zerohedge (@zerohedge) September 22, 2020

So this morning, as if to confirm our speculation of what comes next, Cleveland Fed president Loretta Mester delivered a speech to the Chicago Payment Symposium titled “Payments and the Pandemic“, in which after going through the big picture boilerplate, Mester goes straight to the matter at hand.

In the section titled “Central Bank Digital Currencies”, the Cleveland Fed president writes that “the experience with pandemic emergency payments has brought forward an idea that was already gaining increased attention at central banks around the world, that is, central bank digital currency (CBDC).”

And in the shocking punchline, then goes on to reveal that “legislation has proposed that each American have an account at the Fed in which digital dollars could be deposited, as liabilities of the Federal Reserve Banks, which could be used for emergency payments.“

But wait it gets better, because in launching digital cash, the Fed would then be able to scrap “anonymous” physical currency entirely, and track every single banknote from its “creation” all though the various transactions that take place during its lifetime. And, eventually, the Fed could remotely “destroy” said digital currency when it so decides. Here are the details:

Other proposals would create a new payments instrument, digital cash, which would be just like the physical currency issued by central banks today, but in a digital form and, potentially, without the anonymity of physical currency. Depending on how these currencies are designed, central banks could support them without the need for commercial bank involvement via direct issuance into the end-users’ digital wallets combined with central-bank-facilitated transfer and redemption services. The demand for and use of such instruments need further consideration in order to evaluate whether such a central bank digital currency would allow for quicker and more ubiquitous payments in times of emergency and more generally. In addition, a range of potential risks and policy issues surrounding central bank digital currency need to be better understood, and the costs and benefits evaluated.

The Federal Reserve has been researching issues raised by central bank digital currency for some time. The Board of Governors has a technology lab that has been building and testing a range of distributed ledger platforms to understand their potential benefits and tradeoffs. Staff members from several Reserve Banks, including Cleveland Fed software developers, are contributing to this effort. The Federal Reserve Bank of Boston is also engaged in a multiyear effort, working with the Massachusetts Institute of Technology, to experiment with technologies that could be used for a central bank digital currency. The Federal Reserve Bank of New York has established an innovation center, in partnership with the Bank for International Settlements, to identify and develop in-depth insights into critical trends and financial technology of relevance to central banks. Experimentation like this is an important ingredient in assessing the benefits and costs of a central bank digital currency, but does not signal any decision by the Federal Reserve to adopt such a currency. Issues raised by central bank digital currency related to financial stability, market structure, security, privacy, and monetary policy all need to be better understood.

To summarize, the wheels are already turning on a plan that sees the Fed depositing “digital dollars” to “each American”, a stunning development that essentially sees the Fed bypass Congress, endowing the Central Bank with targeted “fiscal stimulus” capabilities, and which could lead to a dramatic reflationary spike as it is the lower income quartile segments of US society that are the marginal price setters for economic goods and services. And having already implemented Average Inflation Targeting, the resulting burst of inflation would be viewed by the Fed as insufficient on its own (as it would have to persist for a long time over the “average” period whatever it may end up being), to tighten monetary policy. In fact, even as inflation rages – which some alternative inflationary measures to CPI suggest it already is – the Fed will have a semantic loophole in explaining just why it needs to keep inflation scorching hot even as the standard of living in America collapses to the benefit of a handful of asset holders.

Why? The CBO showed the answer yesterday:

Absent a massive burst of inflation in the coming years which inflates away the hundreds of trillions in federal debt, the unprecedented debt tsunami that is coming would mean the end to the American way of life as we know it. And to do that, the Fed is now finalizing the last steps of a process that revolutionizes the entire fiat monetary system, launching digital dollars which effectively remove commercial banks as financial intermediaries, as they will allow the Fed itself to make direct deposits into Americans’ “digital wallets”, in the process also making Congress and the entire Legislative branch redundant, as a handful of technocrats quietly take over the United States.